Category: Technology Author : Steven Hodson Posted: January 11, 2010
Tags : ETF, google, Nexus One, service contracts
Google is still at the babe in the woods stage when it comes to the cellphone err smartphone err superphone business. While it might might be nice to chalk up reports of lousy customer support to lack of experience in the field that excuse won’t last long in the real world of the cutthroat telecommunication business.
It also appears that they have learned one lesson really quick though – screwing their customers.
You see in the cellphone business there is this little handy dandy clause stuck in most service contracts that allow the company to charge you what is termed an Early Termination Fee (ETF) if you decided to cancel your account with them. The reason for the fee is to recover the cost of the cellphone that the company loses when you sign up and get a discounted phone.
Depending on the company raping charging you that ETF can range from $50 to $200 and for the most part is pretty understandable. So it would be understandable if Google was also to charge the same type of ETF except they’ve decided to go one better.
You see in the find print Google will also charge you an “equipment recovery fee” on top of the ETF. As Kent German at CNET explains it:
The Nexus One, of course, is no exception to this rule. If you cancel your T-Mobile contract after the 14-day grace period, you’ll have to shell out anywhere from $50 to $200 depending on when you cancel. That’s all well and good, but a close look at Google’s terms of sale reveals that Google also slaps you with a hefty fee of its own.
According to the document, Nexus One buyers who purchase the phone at the subsidized price of $179 will be liable for an “equipment recovery fee” if the end their contract between the end of the grace period and the first 120 days of service. You read that correctly, you could be forced to pay $550 if for terminating early.
According to the terms of sale, “the equipment recovery fee is not a penalty but is for liquidated damages Google will incur as a result of such cancellation.” It goes on to say, “these damages may include, but are not limited to, loss of compensation and administrative costs associated with such cancellation or changing of wireless service provider(s), market changes, and changes in ownership.”
And this from the company that promises to do no evil. Boy are they learning quick.
Jan 11, 2010
So you expect them to lose money on customers that prematurely terminate their contract?
Jan 11, 2010
*yawn* and the nexus hating continues on the inquistr. here they expect you to be able to buy the phone subsidized, terminate your contract, and only pay $200? anything more is stealing and evil!
i’m finally removing this drivel from my rss reader.
Jan 11, 2010
Shoudn’t you proof your headline?
It doesn’t even make sense.
Sorry, you may have relevant things to say, but with a start like that . . . ugh. Life is too short and opinions on the web are far too many.
Jan 11, 2010
Lol. ETF and your already growing horns. Get a grip. It’s not as if Google has a gun in your head as you buy the phone.
Jan 11, 2010
Seriously, how much is Apple paying you clowns?
If you’d bother to come up off of Lord Jobs’ crotch for air once in a while, you’d realize that this is nothing new.
It’s like Jim Jones all over again with these people. I just wish they’d hurry up and drink the Kool-Aid already.
Jan 11, 2010
The phone is $530 unlocked, if you can cancel your contract and pay less than the price of an unlocked phone then people will abuse the system. The goal for them is to have people sign up for two years, *OR* purchase an unlocked phone… plus the equipment recovery fee only applies for the first 4 months. Just enough time to make things unattractive for people looking to purchase+resell the phone for a quick profit.
Jan 12, 2010
Well the ETF from Google is one thing. Very expensive but I suppose necessary so people won’t exploit the system. But does T-Mo charge an ETF on the same contract? What the hell for? They don’t subsidize the Nexus.
I think I’ll stick with my Finesse on Straight Talk, thank you. Great phone, great service and at half the price of other unlimited everything plans. ($45) Plus there is no need to sign a contract and hence there are no stupid ETF fees.